Organizational diagnosis (individual assessment)

Prof. Bulzacki BUSI 660

Small Business Management

Week 2

https://www.linkedin.com/in/adrian-bulzacki/

WHY IS PLANNING SO IMPORTANT TO SMALL BUSINESSES? Planning

• The process of setting objectives and determining actions to reach them.

Criteria

• Be prepared and be patient.

• Know where to get help.

• Form your own support system.

• Know the power of vertical integration*.

• Never rest on you own laurels. Copyright 2018 by McGraw-Hill Education. All rights reserved.

UCW - BUSI 660 - Small Business Management - Prof. Adrian Bulzacki

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*Vertical integration is a strategy that involves growth through the acquisition of

a producer, vendor, supplier, distributor, or other related company that the acquirer

may already be doing business with.

…PLANNING

• Where can I find needed personnel?

• How much profit can I expect?

• Planning should be the first in performing a series of managerial functions because it sets the future course of action for all aspects of business.

• Planning is the foundation you build on.

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HOW PLANNING RELATES TO OTHER MANAGERIAL FUNCTIONS

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WELL-DEVELOPED PLANS CAN:

• Interest moneyed people in investing in your business.

• Guide the owner and managers in operating the business

• Give direction to and motivate employees.

• Provide an environment to attract customers and prospective employees.

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WHY SMALL BUSINESS OWNERS NEGLECT PLANNING

• Day-to-day activities leave them little or no time for planning.

• They fear the problems and weaknesses planning may reveal.

• They lack knowledge of how to plan.

• They feel that future changes cannot be planned for.

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SOME OF THE MOST IMPORTANT TYPES OF PLANS AND PLANNING FUNCTIONS

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Strategic Planning Examples

Mission: The long-term direction of the business. To provide financial security at low cost.

Objectives: Shorter-term ends to help achieve the mission. • For total firm.

• For functional area.

• Earn a 20 percent return on investment in 2025. • Increase penetration of market by 25 percent by

2026.

Strategies: Means to achieve an end, or courses of action needed to achieve objectives.

• For total firm. • For functional area.

• Establish control procedures to control costs by 2025. • Use 1 percent of sales to improve and expand

service.

SOME OF THE MOST IMPORTANT TYPES OF PLANS AND PLANNING FUNCTIONS

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Operational Planning Examples

Policies: Guides action that provides consistency in decision making, particularly in repetitive situations.

Personnel policy: Promote from within, giving preference to promotions for present employees.

Methods and procedures: Prescribed manner of accomplishing desired output.

Employee selection procedure: Complete application form, test, interview, investigate, select.

Budgets and standards: Plans for future activities using measures for control.

Cash budget: For planning use of money.

THE ROLE OF STRATEGIC PLANNING PROVIDES COMPREHENSIVE LONG-TERM DIRECTION TO HELP A BUSINESS ACCOMPLISH ITS MISSION.

• Selecting the type of business to enter.

• Formulating the mission of the company.

• Deciding whether to start a new business, buy an existing one, or buy a franchise.

• Choosing the product or service to sell.

• Deciding on the market niche to exploit.

• Choosing the type of organization to use.

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THE ROLE OF SWOT ANALYSIS

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Helpful Weakness

In te

rn al Strength

S Weakness

W

Ex te

rn al

Opportunities O

Threats T

MISSION AND VISION

Vision

Explains what the business is stressing to become in the future.

Mission statement

Defines the present business scope and broadly describes the organization’s present capabilities, focus, and activities.

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TYPES OF PLANNING

• Strategic planning before starting the business.

• A business plan to attract investors, financiers, and prospective employees.

• Continuous operational planning and control before and after the business starts operating.

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WHEN WE STARTED A FURNITURE RETAIL CHAIN, WHAT DID WE CONSIDER? • Street retail (separate entrance)

• Malls

• Specialized malls (Home and furniture)

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Location

Location

Location

STREET RETAIL

Where is the best spot here?

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STREET RETAIL

Where is the best spot here?

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Entrance/Exit

Entrance/Exit

MALL

Which Property Should We Rent?

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Product Store (Supermarket)

1 2 3 4 5 6

7

8

9

IT DEPENDS!On the Entrance / Exit

MALL

The Traffic

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Product Store (Supermarket)

1 2 3 4 5 6

7

8

9

MALL

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Product Store (Supermarket)

1 2 3 4 5 6

7

8

9 The Traffic

How To Choose The Idea And Validate It?

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HOW TO CHOOSE THE IDEA AND VALIDATE IT? WORK IN TEAMS AND DISCUSS THE FOLLOWING

1. What are the main criteria to choose the idea for business? What rationale stands behind the idea?

2. How do we validate that the idea is worth time and other resources?

3. Make a small research, choose a company and prepare a very short story about how this business started.

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15 minutes to discuss

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WHAT IS VALUE PROPOSITION?

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WHAT CUSTOMER GAINS DOES YOUR BUSINESS PROVIDE?

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UNEXPECTED

REQUIRED EXPECTED

DESIRED

WHAT CUSTOMER PAINS DOES YOUR BUSINESS SOLVE?

THANK YOU QUESTIONS? UCW - BUSI 660 - Small Business Management - Prof. Adrian Bulzacki

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